Mr. Ned Costello:

I will skip over one or two areas in my written statement in the interest of being brief. I thank the Chairman for the opportunity to discuss this important topic with the committee and I hope I can respond to some of the issues in the statement that were raised in the previous session with the Higher Education Authority, HEA, and the Department.

I will begin by recapping the overall aims of the strategy which could be summarised as promoting the further development of a higher education system which is world class in both the quality of its education and research and the efficiency with which it operates and which is underpinned by a sustainable funding model. That vision is consistent with the individual and collective strategies of the universities. The seven institutions that comprise the Irish Universities Association, IUA, are all committed to research, research-led teaching, and educating rounded graduates who are imbued with the skills for both lifelong learning and employability.

The operating environment for the universities is highly internationalised. It is reflected in the increasing diversity of the staff and student population and the academic and economic linkages of the institutions. It also reflects the importance of international trade to an economy such as Ireland's.

Turning to the strategy, this year has been one of intensive activity for the universities and the IUA and I will summarise some of the main developments.

Early in the year we were asked by the Minister to bring forward proposals for the reform of governance of the universities and we reported to the Minister in May. A copy of our report is in our submission. At the core of our report are the proposals for streamlining governing authorities and academic councils and in particular bringing a competency based approach to the selection of governing authority members.

In the context of governance I have to note our concerns about heads of a Bill published recently by the Minister relating to specific amendments to the Universities Act but I welcome the recent statement by the Minister in the Clock Tower that these proposals would be taken forward in the context of governance reforms overall. As members will see from our submission, we are strongly committed to reforming the governance structures for universities.

Regarding the first year experience, which is another important part of the strategy, we were asked by the Minister to examine proposals for reform of selection systems and entry to third level. Our interim report is appended to our submission. In that report we stressed the importance of the leaving certificate and selection and admission systems co-evolving and that one should not take place without the other. We made a number of specific recommendations including the development of more common entry routes and the incentivisation of strategically important subjects. We are now taking those and other considerations forward in a task force under the chairmanship of Professor Philip Nolan, President of NUI Maynooth, and my colleague, Mr. Lewis Purser, is the secretary to that group.

In regard to teaching and learning, and this also bears on the first year experience, that is an important aspect of the higher education strategy and we strongly welcome the recent announcement of the establishment of the National Forum for the Enhancement of Teaching and Learning. The national forum will serve as a national platform for academic-led enhancement of teaching and learning, linking institutional centres of expertise and existing networks. Its focus will be on adding value to a great deal of work which has been undertaken already under the strategic innovation fund, SIF, initiative but which now can usefully be brought together in a more concerted way.

On the important matter of funding and the sustainability of funding, we have also been engaging with the HEA on this and submitted a detailed response in our submission to its funding model consultation paper. From our point of view, we reiterate the importance of an income-contingent student loans system which we have advocated for a number of years. While we understand the perilous state of finances currently, we believe it is very important that the planning for such a system takes place now even though it may take a number of years to implement.

On the specific matter of the trend in funding, we would point to two main trends. The first is a decline in overall funding and the second is a shift from Exchequer to non-Exchequer funding. These trends can be illustrated by examining income per student. Between 2007 and 2008 and 2010 and 2011, income per student declined from approximately €16,000 to just over €14,000, which is a decline of 10.8%. However, Exchequer income declined from €11,889 to €10,013, which is a decline of 15.8%. One can see, therefore, that Exchequer funding is declining faster.

While those trends are of concern they would have been much worse if it had not been for the efforts of the universities to reduce their dependence on the Exchequer. Non-Exchequer income is now a strong feature of all universities and accounts for, on average, about one third of university funding; in some cases it is close to 50% of some of the universities' funding. It is essential that universities have the flexibility and agility to continue to compete for such income, whether it is from externally funded research, alumni philanthropy, postgraduate or non-EU undergraduate student fees.

On the matter of efficiency about which I know the committee is concerned, at the macro level it will be recalled that a 2009 econometric study by the EU Finance Directorate found Ireland to be among a top ranked group of countries for efficiency of its higher education system. Our peers were the Netherlands, Japan, Sweden and the United Kingdom. Since that study was published efficiency has improved further, and that is underscored by the fact that between 2008 and 2012 staff numbers in the universities contracted by 10% while student numbers increased by 10%, further boosting efficiency. The study found the system to be efficient because of its relatively low level of State investment which is below the OECD average; high levels of teaching productivity as reflected in student-staff ratios; high levels of research productivity and impact; and high levels of employer satisfaction.

The universities continue to perform strongly across all of these headings and recent survey evidence, which we have seen in draft form and which we will share with the committee as soon as it is published, suggests that that continues to be the case. However, it must be said that a fine balance needs to be struck between raw efficiency and the quality of the system and in that context, the continuing increase in student-staff ratios driven by ECF reductions in staff numbers and the burgeoning student population is of concern because the ratios have risen from 20:1 in 2008 to 24:1 on average in 2011. That is in the context of those 20:1 ratios already being substantially higher than they would be in comparatively ranked universities elsewhere where they would be in the low to mid-teens.

I would like to address some concerns raised by the committee in regard to administrative and operational efficiency. Regarding the academic year and the use of facilities I wish to clarify a number of matters. Universities operate for the full calendar year, and this is specified in the revised academic contract under the Croke Park agreement. In that regard, universities do not close at weekends or during the summer and the summer period in particular is utilised for a range of activities that include short teaching courses, repeat examinations, postgraduate research, all other ongoing research, commercialisation and technology transfer activities, and a range of conferences and summer schools. Many of those activities are very important as part of the non-Exchequer income of the universities.

Regarding the remuneration of academics, I am aware this issue was raised in the committee on the previous occasion and I would like to bring some context to it. It is true that on average pay levels, in the aggregate, are competitive in Ireland; it could be said that they are very competitive. However, our remuneration system is very homogenized which one does not find in other systems internationally. There is evidence that it is not competitive in terms of recruiting the best talent either at the upper end or the bottom end. One must be careful about data in this area because average levels do not reveal what universities actually do in practice internationally because most of them set their own wage rates.

Moving to the higher education landscape and addressing the matter of collaboration, I want to stress the importance of competition and diversity in the system. That is an important part of the strategy. However, diversity does not preclude or militate against collaboration. The members of the IUA and all our working groups collaborate strongly across virtually all aspects of the universities; I have referred already to some of those aspects of collaboration.

Turning lastly to the higher education landscape process, we welcome the clarification recently from the Minister in his speech in response to the various HEA reports.

In particular, we welcome the Minister's emphasis that the overall policy orientation in the Hunt report remains appropriate. In that regard we believe that, with due regard for the maintenance of diversity, the most effective strategy is to promote inter-institutional collaboration reinforced by mission-based and regional clusters. The universities intend to be proactive in taking this process forward.